CNBC Arabia_ Meta Platforms Meta Platforms shares fell by approximately 6% during Thursday's trading session, after the company revealed negative free cash flows in the third quarter and raised the lower end of its annual capital expenditure forecast, raising investor concerns regarding the cost of expanding investments in artificial intelligence.
Meta recorded negative free cash flows of $2.12 billion during the third quarter, indicating financial pressures resulting from massive spending plans associated with AI infrastructure expansion.
The company raised the lower bound of its expected full-year capital expenditure range to $135 billion, compared to the previous range of $130 billion to $145 billion, while keeping the upper bound at $145 billion.
The cost of the company's five-year credit default swaps reached an all-time high, signaling growing investor concerns regarding Meta's creditworthiness amid increased spending on artificial intelligence.
On Wednesday, Meta announced the creation of a new class of non-voting Class C common stock, aimed at preserving the company's founder-led structure and providing additional flexibility to finance growth.
n
The company stated in a filing submitted to the U.S. Securities and Exchange Commission that CEO Mark Zuckerberg may leave the state of California if the "California wealth tax" is enacted, given the potential exposure to billions of dollars in tax liabilities resulting from his share ownership.
The filing added that the new stock plan helped convince Zuckerberg to remain in the state.
Conversely, Meta's revenues surged by 26% year-on-year during the third quarter to reach $64.6 billion, exceeding analysts' expectations of $63.37 billion.
Earnings per share stood at $3.83, while it remained unclear whether the figure was directly comparable to Wall Street estimates of $5.75 per share.
